Consumer spending rose in November, beating forecasts and easing concerns of an economic recession, while inflation raised its fastest pace in two years, the Commerce Department said on Friday.
Personal consumption climber a higher-than-expected 1.1 percent compared to October, implying that the economy may not delay development as much as many analysts had feared. The increase was the highest rate since the 1.2 percent in May 2004. October spending rose an upwardly revised 0.4 percent while the months spending were originally predicted by analysts to be 0.2 percent higher.
Incomes also advanced, while the Federal Reserve's preferred measure of inflation accelerated, the report showed. The rise in prices makes it harder for the Federal Reserve to cut interest rates at its next meeting.
The Fed will likely focus on the annualized 2.2 percent rise in its preferred inflation index, which excludes the volatile costs of food and energy. Central bankers are said to prefer that the index, known as the P.C.E. deflator, remain below 2 percent.
Over all, inflation has risen 3.6 percent over the last 12 months, reflecting a sharp rise in prices since the summer.